“Much of the utilities’ technology isthirty years old, which is old technol-ogy. We need better technology andbetter control systems, and if we dothat, the cost of bringing electricity on-line will cost less. There will be less lineloss—less congestion on lines. Then wewon’t lose as much electricity and wewon’t lose significant dollars. How to dothat? By coming together.”Collective planning means puttingheads together to figure out how to findfinancing. Upgrades aren’t then shoul-dered by each small utility, he says.

Alaska has four co-ops and two mu-nicipal-owned utilities, but no investor-owned utilities in the Railbelt. “We need
a transmission system. Think of it as a
highway. We need to get enough lanes
to get all the cars down there without a
traffic jam,” Borgeson says. “We all have
our own cars and trucks. But we have to
have a highway, a united grid.”

Chugach Electric’s Role

Chugach operated as a quasi USO since
the mid-1980s, notes Executive Manager of Grid Development Brian Hickey.
Through a series of agreements with
GVEA in Fairbanks, MEA in Palmer-Wasilla, and HEA in Homer, Chugach
acted as a co-op serving 80 percent of the
Railbelt until more recently. That meant
Chugach did the planning, construction,
and operations for an expansive area.

The wholesale power agreements terminated for HEA in 2013 and for MEA
in 2014, and through April this year.
There were advantages in the arrangement that showed efficiency for joining
agreements, rather than total independence on the part of each utility’s operation.

“Now that broad area has been frag-mented,” Hickey says. “So if we are notgoing to have the prior arrangement,then what arrangements can we makeon good investments going forward?”Renewable projects like wind andhydro are worked into the energy gridas an on-going need, he says.

The tangle of jurisdiction is made com-plicated since the electrical transmissionsystem comes under different ownershipfrom Homer to Fairbanks. But the Railbeltgrid itself operates as a single machine,Hickey says, by way of illustration. Elec-trical generators in Fairbanks move thesame as generators in Homer. Much likeautomobiles, which have tires and enginesthat tend to work on the same principles.

“Yet, if the tires just take care of the
tires and the driveline just takes care
of driveline, you reach a suboptimal
solution,” Hickey says. That’s where
the Railbelt stands at a disadvantage in
its ability to provide interconnections
because each is tasked to only worry
about its own function.

A big concern on consumers’ parts
has been costs. Those in Anchorage’s
ML&P and Chugach coverage areas pay
lower kilowatt rates than Fairbanks,
for example. Will an integrated system
cause Fairbanks to pay less while Anchorage pays a higher rate than before?

The overall cost-benefit ratio will benefit consumers, Hickey says, though at first
those who pay more may pay less, and
vice versa for those at the lower rate now.

“There will be a period of transition,”
Hickey says. But the net makes the
overall cost-benefit ultimately lower,
he adds. The results of the AEA study
pointed to a clear cost-benefit ratio.

The benefit of a USO is that it centralizes costs for improvements and finds a
way to fund them, Hickey says.

In the Lower 48, an investor-owned
utility can both bring down costs to benefit consumers and do well on its investment, he says. He has been meeting with
financiers visiting Alaska to explore how
merchant-owned utilities from private
funding might function to solve the Railbelt’s electrical integration issues.

Next Step

The RCA’s response to its docket request
from the Alaska Legislature will go a
long way toward determining whether
the proposal to form a joint Railbelt
transmission grid could prove feasible.
The deadline for the commission’s final
report is fast approaching in June.

ARCTEC’s Gillespie says he feels encouraged by discussions he hears in
public arenas and adds: “I think we are
making good progress.” R

Naomi Klouda is the former
editor of both the Homer Tribune
and the Tundra Drums. She is a
lifelong Alaskan and freelances
from Anchorage.